Just a few days into the New Year and unexpected turmoil on the financial markets has already resulted in higher gold prices, as investors seek a safe haven in stormy waters.

A crash on the Chinese stock market on Monday (4 January), which resulted in trading being stopped early due to a seven per cent plunge, echoed around the globe. Indices across Asia, Europe and the US ended the first trading day of 2016 down.

The financial performance of China, the world’s biggest buyer of gold, has serious knock-on effects in a global economy. Analysts said the chaos seen at the start of the week was caused by further evidence of China’s slowing economy, with the publication of data showing the country’s manufacturing sector is continuing to contract.

This, combined with political volatility in the Middle East sent the gold spot price soaring. Both oil and gold prices, which traditionally mirror each other’s performance, increased after Saudi Arabia broke off diplomatic relations with Iran.

On Monday, the gold price climbed to £733.47 per troy ounce at 15:30, and reached £736.85 by 17.30 yesterday (Tuesday, 5 January). This morning, gold was trading at £740.31 per troy ounce at 09:00.

The boost is largely due to the fact that investors consider gold to be a less risky place to store their money in difficult economic times. The strengthening world economy seen over the last 12 months, which resulted in the US Federal Reserve increasing the cost of borrowing at the end of 2015 for the first time in almost a decade, contributed to recent falls in the gold price.

But according to Lindsey Group chief market analyst Peter Boockvar, the latest news from China shows the international financial picture may not be as rosy as previously thought.

He told CNBC:“China's stock market obviously had its craziness last year, but the underlying context is the Chinese economy has been slowing for years, but it's a wake-up call to the markets that the US economy is slowing down; the global economy is slowing down, and central bankers are losing their effectiveness in propping things up.”

So if you’re seeking a safe harbour for your investments, now could be the time to consider gold.